Friday, place-shifting TV technology company Sling Mediaannounced a deal to stream NFL games to DirecTV customers. The move away from consumer hardware and software and into business to business services came as a surprise. Even more surprising is Sling’s Monday evening announcement. The company announced it will sell itself to DirecTV competitor Echostar (operating of Dish Network) for approximately $380m.

Leading up to the sale, Sling was preparing for a sizable Series C deal. The buyout apparently developed as an alternative from there. The deal is primarily cash based. Compensation also will include some sort of option and incentive components to provide upside to the founders and team for their continued success . The details of these incentives have not been disclosed but Sling’s CEO Blake Krikorian did comment that he "wouldn’t do this unless I thought there was some additional upside." Performance milestone payouts or performance related options are likely.

As part of Echostar, one looming question is what will become of Sling’s platform. Will the DirecTV deal and other partnerships fall apart? Will the features for place-shifting (recording TV in one place and watching it another) Sling pioneered be tied exclusively to the Dish Network or will they remain open to other platforms, domestically and abroad? Blake Krikorian is saying in interviews it will be status quo, that the company will remain “platform agnostic.” The deal is about cash flow and resources, not a change of direction and strategy. We’ll see if the new owners share the same thought six months from now.

Another question looming over Sling’s future is legal. We’ve all seen the FBI (or Interpol) warnings at the start of a DVD or the copyright statements on a sportscast. They usually say something like “Any duplication or rebroadcast is expressly prohibited with the prior consent of…” The question is, for place-shifting services like Sling or Sony’s Location Free TV: What is a "rebroadcast?" Is streaming a program to your computer from the TV, or to your cell phone a rebroadcast? If it is a rebroadcast is it at least legal if its for personal use? Does the idea fall under the tests of copyright’s Fair Use doctrine? Or is the whole concept illegal? Also, does Slings service violate Cable TV service agreements that provide the terms of satellite or cable distribution and use?

Copyright law can be confusing stuff. So far, the debate has not gone before the courts for judgment so there is no certain answer. There’s a swathe of comments from boths sides and lots of opinions.

The issue is especially contentious for Pro Sports leagues who often have lucrative and exclusive broadcast partnerships that limit regional broadcasts and provide local “blackouts” for programming under certain circumstances. Place-shifting technology has the potential to minimize the impact (and ultimately the revenue upside) from those agreements.

Sling has tried to address these issues proactively with partnerships. They’ve signed deals with both the NHL and the NFL. Major League Baseball, however, has remained an outspoken critic and its spokespeople have at times called place-shifting illegal.

Moving forward, with the deeper pockets of Echostar, these legal issues could disappear or become even more of a liability. Will Sling get a bullseye on its back? As a part of Echostar, the question has to be asked whether things will be smoothed over and settled or blow up. It’s a tough question. I wouldn’t be surprised to see an escrow component to the acquisition, or a fund set up after the fact, that assures capital is in place just in case. Google set up a pretty large slush fund to handle YouTube related legal issues. On a smaller scale, acquiring Sling could warrant similar.

Those best off, and probably dancing a jig, are Sling’s investors. They contributed $56.6m in two rounds since the company’s formation in 2004. The reported sales prices means a return of more than 6x capital invested in just three years. And now they won’t have to worry about legalities either.

The deal is expected to close in the 4th quarter. More information and analysis on the deal will follow as more becomes available.